Heavy demand for private equity’s $570m Transpacific stake

Private equity firm
Warburg Pincus
has sold its entire stake in
Transpacific Industries
in a $570 million deal, after demand for the stock exceeded expectations.

Warburg hired investment bank UBS to initially sell two-thirds of its 33 per cent stake in Transpacific on Saturday morning, but the deal was upsized by the afternoon after the broker received strong demand from institutions. The 535.3 million shares were offered to fund managers at $1.05 each, a 7.5¢ a share discount on Friday’s close.

Warburg Pincus subsidiary WP X Holdings saved Transpacific from its banks in August 2009, when it bought a 30.9 per cent stake in the company as part of a recapitalisation plan. Warburg invested a total of $521.5 million in the company at an average 97¢ a share.

The sale came just days after Transpacific announced plans to sell its New Zealand operations in a deal potentially worth as much as $NZ700 million ($611 million) to focus on Australia, reduce debt and pursue growth opportunities. The NZ plan follows Transpacific’s recent sale of its motor vehicle distribution business.